R.I. House to debate 38 Studios’ debt

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PROVIDENCE — Discussion on whether Rhode Island should pay the debts associated with its failed investment in 38 Studios will likely dominate Tuesday night’s General Assembly debate on an $8.2 billion state budget proposal.

The Rhode Island House of Representatives plans to vote late Tuesday or early Wednesday morning on the spending plan, but not before considering a variety of amendments submitted by lawmakers.

Lawmakers expect big debates on the 38 Studios bond payment, a plan to impose tolls on the new Sakonnet River Bridge, and a proposal to shift more than 6,000 low-income parents from RItecare to the federal Affordable Care Act.

The budget proposal includes a $2.5 million payment to bond holders associated with the state’s $75 million loan guarantee given to former Red Sox pitcher Curt Schilling’s video game company, 38 Studios. Many lawmakers have said they want to default on the bonds, saying taxpayers shouldn’t have to pay for the bad investment. But Governor Lincoln Chafee and bond experts warn a default would harm the state’s financial reputation and significantly increase the cost of future borrowing for roads, bridges, and other projects.

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Nonetheless, House Republicans and some Democrats are likely to push to default on the money.

The budget includes $50,000 to study the state’s options for the debt. That will give lawmakers time before the $2.5 million payment is due in May to better understand the state’s options, according to Representative Helio Melo, who leads the House Finance Committee.

Lawmakers from the East Bay are expected to try to stop the imposition of tolls on the new Sakonnet River Bridge. State transportation officials say the tolls could begin as soon as next month, and are needed to pay for bridge maintenance.